NOW WASHINGTON MUST DELIVER

By Gary Burnison   The Washington Times

December 23, 2010

Imagine, for a moment, that the United States is a company. Without a doubt, it is an industry leader with a great global (albeit sometimes controversial) brand, ample resources and vast real estate holdings from mountains and beaches to verdant farmland. This company, however, is in trouble. It is losing $3 billion a day, and for every $3 collected in revenue, $4 is paid out in expenses. Over the past decade, the company has overspent and underinvested, particularly in the education and skills of its work force.

As a result, the strategic plan and budget reveal massive annual losses extending into the foreseeable future. The balance sheet is heavily leveraged to the tune of four times revenue, or $12 trillion. Its off-balance-sheet liabilities (the kind that got Enron into trouble) are even higher. Add to that a chief executive who is at odds with the board of directors, a board that is deeply divided and a shareholder protest movement that is gathering momentum. In what amounts to a proxy fight, half the company’s shareholders recently voted to support the chief executive, and half did not.

Little wonder then that every important issue raised ends in bottleneck. Self-interests battle each other for self-preservation, even at the expense of the enterprise as a whole. Once the global leader in innovation, this organization is on the verge of stagnation. There is some good news for this company: Its operating structure is nimble, its work force is resilient, and most of its competitors still view it with envy.

Besieged by so many challenges, any company would face credit-agency warnings and downgrades. Creditors would be circling the waters, and the board and company’s leaders would be replaced with “turnaround” experts. The company would have to react with extreme urgency, starting with an immediate assessment of its operating environment, competitive landscape and market opportunities. Costs would be slashed, and a turnaround-and-growth strategy would be unveiled. Action would be taken with a single goal in mind – survival – and that goal would be shared by everyone who comes to work.

Of course, this is not a company at all – it is the U.S. government. No one should necessarily expect a government to be as nimble as a corporate entity. Their structures are different. Nevertheless, leaders in government should feel the same sense of urgency and accountability to their constituencies as business leaders feel to theirs. And they should act. Not in the interests of their own short-term agendas – the next election – but for the nation’s longer-term goals. Like business leaders everywhere, government leaders must commit themselves to creating real, lasting value.

Any turnaround plan for the United States must begin with clear communication to convince Americans of the severity of the problem and to convey a sense of urgency and common purpose. Only through clear communication will government be able to get people to rise to the occasion. To create common purpose, leaders must begin with themselves. They must be self-disciplined, willing to sacrifice and cognizant of the fact that how they behave sets the tone for how others behave.

Washington has been reticent to tell taxpayers about the new reality – that we cannot avoid doing the hard work of solving our problems for very long. But hard work, self-discipline and sacrifice are not alien to our culture. We have called upon those virtues before, such as during World War II, when shared sacrifices and commitment to victory became the nation’s rallying cry. Instead of rhetoric, today we need a rallying cry to commit to economic growth and victory. We need to stand for something.

The world the United States will enter when this grim period finally ends will not be the same world as before. While we stumbled, others raced ahead. While Finns, Estonians and Canadians worked hard to take the top three spots in the Organization for Economic Co-operation and Development’s rankings of top performers in science, the U.S. fell to 22nd place. Though the U.S. used to top the World Economic Forum’s global competitiveness index, it now ranks fourth, behind Switzerland, Sweden and Singapore. With these lapses, it’s no wonder the U.S. created no new private-sector jobs over the past decade, according to the Bureau of Labor Statistics.

The United States always could count on its domestic market, which accounted for much of the world’s middle-class population, for growth. That will shift over the next 20 years, with two-thirds of the world’s middle class residing in Asia. When that happens, other countries will have significantly more influence. Rather than fight it, we should embrace it. Rather than trying to divide the pie for political gain, we should grow the pie for national good. As a country, we need to tap the tidal shift in global consumerism over the next two decades. We were never a country that built walls – we built bridges. We need to build a bridge to Asia, with lanes going in both directions – one for imports, one for exports.

Clearly, the United States is at a crossroads. We need a vision of what is possible, the courage to embrace sacrifice and cutbacks in the short term, and a plan for building and sustaining long-term growth. That vision must be of a common purpose that puts the health of the country above the aims of the legislators.

Now is the time to recognize our strengths, realistically assess our weaknesses and apply the one to solve the other. This is a time when the structure of our country – our freedom to innovate, to start businesses, even to fail – must be called upon in the service of growth.

Washington must decide whether its assemblies are to be convened as places to work or to argue. If the wrong decision is made, we could lose a generation.

Just as every chief executive is ultimately answerable to the shareholders, so are the chief executive and legislative leadership in Washington. The shareholder-voters have spoken loudly and clearly: They are concerned about the economy, unemployment and government spending. As much as they want meaningful change, according to a recent poll, more than three-quarters of voters say they expect divisiveness and little willingness to compromise.

Rather than debate and stagnate, this is the moment to act and operate. The country simply deserves more. Now Washington must deliver.

Gary Burnison is chief executive of Korn/Ferry, an international talent management firm.